Page:United States Statutes at Large Volume 90 Part 2.djvu/441

 PUBLIC LAW 94-455—OCT. 4, 1976

90 STAT. 1909

is to be made as of the later of the date of acquisition of the oil or gas property by the partnership, or January 1, 1975. A partner's proportionate share of the adjusted basis of partnership property shall be determined in accordance with his interest in partnership capital or income and, in the case of an agreement described m section 704(c)(2) (relating to effect of a partnership agreement on contributed property), such share shall be determined by taking such agreement into account. Each partner shall separately keep records of his share of the adjusted basis in each oil and gas property of the partnership, adjust such share of the adjusted basis for any depletion taken on such property, and use such adjusted basis each year in the computation of his cost depletion or in the computation of his gain or loss on the disposition of such property by the partnership. For purposes of section /05 732 (relating to basis of distributed property other than money), the partnership's adjusted basis m mineral property shall be an amount equal to the sum of the partners' adjusted basis in such property as determined under this paragraph." (2) Subparagraph (G) of section 703(a)(2) (relating to 26 USC 703. deductions not allowed to a partnership) is amended by striking out "production subject to the provisions of section 613A(c)" and inserting in lieu thereof "wells". (3) Subsection (a) of section 705 (relating to the determination 26 USC 705. of basis of a partner's interest in a partnership) is amended— (A) by striking out "and" m paragraph (1)(C), (B) by striking out the period at the end of paragraph (2) and inserting in lieu thereof "; and", and -(C) by adding at the end thereof the following: "(3) decreased (but not below zero), by the amount of the partner's deduction for depletion under section 611 with respect to oil and gas wells." (d) RELATED PERSON.—Paragraph (3) of section 613A(d) (relating 26 USC 613A. to the definition of related person) is amended by adding at the end thereof the following: "For purposes of determining a significant ownership interest, an interest owned by or for a corporation, partnership, trust, or estate shall be considered as owned directly both by itself and proportionately by its shareholders, partners, or beneficiaries, as the case may be." (e) TRANSFERS or O I L AND GAS PROPERTY W I T H I N THE SAME CON-

TROLLED GROUP OR FAMILY.—Subparagraph (B) of section 613A(c)

(9) (relating to transfer of oil or gas property), as amended by subsection (b)(1), is amended— ^1^ by striking out "or" at the end of clause (ii), (2) by striking out the period at the end of clause (iii) and inserting in lieu thereof a comma, and (3) by adding at the end thereof the following: "(iv) a transfer of property between corporations which are members of the same controlled group of corporations (as defined in paragraph (8)(D)(i)), o r " (v) a transfer of property between business entities which are under common control (within the meaning of paragraph (8)(B)) or between related persons in the same family (within the meaning of paragraph (8) (C)),or

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